Buy, Buy, Buy—The Fed’s Got Your Back, Back, Baaack!

It seems to be the case that markets are once again driven by the unshakable belief that the central banks will have their backs if necessary. And sooner rather than later. They are apparently not bothered by the warnings of the limited scope for further monetary policy stimulus. The simple reason is the expectation that the less room there is for more traditional responses, the more the likelihood for more extreme measures, as there won’t be any choice. And risk assets will like that even more. What a world.